Having and managing money is a big deal, and it doesn’t feel comfortable for some women. However, learning to increase your financial confidence can mean the difference between reaching your financial goals and hiding behind the curtain.
We’ve shared some important ways to improve your financial confidence as a woman so you can make smart and healthy money decisions for yourself in life.
What is financial confidence?
Financial confidence, like regular confidence, can take on many meanings. For most, it means they feel in control of their finances and can reach their financial goals. When you don’t feel financially confident, you’re less likely to make important decisions about your finances and/or to achieve your financial goals.
How to define and measure financial confidence
How you define and even measure financial confidence may differ from how your friends or even family members measure it.
For some, proving that they have enough money, can reach their financial goals, and understand their options for saving, investing, and borrowing money means they have high confidence in their finances.
Just having a lot of money doesn’t mean you are financially confident, though. For some, it’s knowing how to make financial decisions and the ability to follow through on intended goals. Every woman can decide what it looks like for them and then take the steps to make it happen.
How demographics affect financial confidence in women
Demographics can play a role in how women view their financial confidence. For example, women who are single, rent, or unemployed often have much lower levels of confidence in their financial decisions than women in high-powered jobs, who are married, and who own their homes rather than rent.
Just the environment you are in can make or break how you feel about finances. You are who you surround yourself with, and if you’re around people that aren’t confident in their finances, it’s easy to follow suit.
Why women should become confident in their finances
It’s important for everyone to be confident in their finances, especially women. Since the wage gap between men and women still exists in 2022, women have to work harder, save more, and spend less to have the same amount of money as men.
As women, we shouldn’t have to rely on men to keep us financially secure. For example, what would happen if you got divorced or your spouse died unexpectedly? Understanding finances, how they work, and how to make powerful financial decisions is vital for women of all ages.
How can I improve my financial confidence?
If you don’t have any financial confidence right now, don’t worry, there are ways to improve it. The first step is recognizing that you aren’t confident in your financial decisions or abilities. The next steps are below.
1. Create a realistic financial plan
A realistic financial plan can help you plan for the future. Just thinking about what you want to do isn’t enough. Make it official with a written financial plan. This gives you something to work toward and a way to measure your progress.
Keeping it realistic is important so that you can see success. For example, saying you want to save $1 million in the next year isn’t practical, but saying you want to find a way to save/invest and earn $1 million by retirement can be entirely feasible.
2. Budget your money
A study by the Certified Financial Planner (CFP) Board found that participants with a budget set up feel better about their finances and feel like they have control over their money. Approximately 62% of people surveyed said a budget made them feel more in control, and 55% felt more confident.
Budgets don’t have to be restricting or overwhelming. Creating a budget tells you where your money needs to go and how much ‘free money’ you have. They are like the blueprint for your money, and they can significantly help increase your financial confidence.
3. Set money aside for uncertainties
No one likes to feel like they aren’t prepared. What if the unthinkable happens? How would you pay for it?
Setting money aside in an emergency fund, rainy day fund, or both can help you feel more secure about your finances. If you lose your job or your car breaks down unexpectedly, you’ll know that you have the funds to cover the costs without causing any more worry.
4. Educate yourself
You will never know everything there is about personal finances. There is always something to learn. Educating yourself can make you feel more empowered and able to make tough decisions about money.
Some of our favorite books that we recommend to help women feel more financially confident include:
- Dump Debt & Build Bank: The Everyday Chick’s Guide to Money
- Clever Girl Finance
- The Sassy Investor
- The Secrets of Six-Figure Women
5. Uncover your beliefs around money
Your money story can make or break your financial confidence. Figuring out your beliefs around money starts with going back to your childhood. How did your parents treat money? How did they talk about it around you?
Think about whether you felt like there was never enough money, your family was poor, your family had plenty of money, or your parents always fought about money. How you were brought up with money can help shape your beliefs about it, but that doesn’t mean you can’t change it.
6. Focus on the small wins
You aren’t going to change your finances overnight. Setting large goals can be overwhelming, but breaking them into smaller pieces can help you see those small wins. Celebrate even the smallest victory, such as saving $500 or paying off a small credit card.
Let yourself feel proud about the progress you made, and it will push you forward to do more and increase your confidence even further.
7. Initiate money discussions
Don’t be afraid to talk about money. Unfortunately, many women live under the expectation that they shouldn’t talk about it. In fact, a Fidelity study showed that only 47% of women are willing or feel comfortable talking about money.
It’s time to end that stigma. Make talking about money feel regular. Let people know that you know what you’re talking about, and you want to surround yourself with like-minded people who have similar financial goals as you.
The more open you are about money with your partner, spouse, or family, the easier it is to make sure everyone is on the same page too.
8. Get help
Don’t be afraid to ask for help with your money. Whether you don’t know how to invest, can’t figure out how to budget, or just want someone else to look at your finances and tell you what to do, it’s okay.
Find an expert that specializes in what you need and that you can trust. Learn from your financial expert and increase your financial confidence by becoming more educated and empowered.
9. Find the right money tools
A quick search online will show you hundreds of financial tools that you can have at your fingertips. Find the tools that will help you with what you need. Whether you need a budgeting app, an investment platform, or you’re trying to learn more about personal finances, there are plenty of money tools out there to help you reach your goals.
10. Recite money affirmations
Your self-talk has a significant impact on your confidence or lack thereof. When it comes to building your financial confidence, saying money affirmations can help you become more confident in yourself. Things like, “I am good with money,” may sound untrue at first, but if you keep reciting it you’ll become what you say.
Financial Confidence: Final thoughts
Confidence is the key to a successful financial life. Don’t hide behind the stigma that women shouldn’t handle money or make money decisions. Instead, get educated, empowered, and ready to take charge of your finances and reach your financial goals all by yourself.
